Agencies Issue Final Rule Implementing S. 2155 LCR Adjustment

The federal banking agencies today issued an interim final rule that implements an American Bankers Association-advocated provision of S. 2155 that expands the pool of what counts as high-quality liquid assets under the Liquidity Coverage Ratio.

The rule — which takes effect upon publication in the Federal Register — treats liquid, readily marketable and investment-grade municipal securities as HQLA for the purposes of the LCR, one of the Basel III liquidity regimes. Included in the S. 2155 regulatory reform bill, this bipartisan provision has been advocated by ABA for years and introduced as standalone legislation in several previous Congresses.

Comments will be accepted on the interim final rule for 30 days after it is published. For more information, contact ABA’s Alison Touhey.